03/11/09 Baltimore, Maryland Treasury Secretary Tim Geithner is taking his sweet time to work out the details of TARP II. But for all the uncertainty surrounding his plans, we know one thing: Zombie banks will not be allowed to go under.
Geithner just reaffirmed this, though not in so many words, in an interview with Charlie Rose.
Asked about the possibility of letting a major bank fail, he said, “I’ll say again, they play a critical role in our markets, in our financial system. We want to continue to make sure they play that role. Now, where they need temporary assistance through the government to get through that, we’re going to make sure it comes with appropriately tough conditions so that they emerge stronger and that we’re providing a level of conditions and accountability that’s appropriate in this context.”
Translation: They can continue screwing up indefinitely, and we’ll still come to their rescue.
The “stress tests”? That’s just a sham to make it look as if the banks are being held to some sort of standard.
Working from the same playbook, Fed chief Ben Bernanke said yesterday, “We have reiterated the U.S. government’s determination to ensure that systemically important financial institutions continue to be able to meet their commitments.” And if it that means the Fed has to buy up Treasuries (and print money for that purpose), so be it.
Consider yourself warned.
Consider also that the Zombie Policy isn’t even achieving its stated aims. Weren’t we promised that if the Fed and Treasury kept pumping money into these banks, the banks would lend more freely, and businesses could borrow more easily, and so businesses could create more jobs?
Well, not so much. “Banks that have received billions of federal dollars to encourage them to make loans — JPMorgan Chase & Co., Goldman Sachs Group, Citigroup Inc. and Bank of America Corp. — are lending money to Pfizer and Merck” so they can buy out Big Pharma competitors, according to the Los Angeles Times. The mergers could result in 35,000 jobs lost.
Heckuva job, Timmy. Heckuva job, Benny.
Dave Gonigam
Treading a fine line between contrarian thinking and conspiracy theory, Dave Gonigam explores the nexus of finance, politics, and the media for Agora Financial's 5 Minute Forecast. He joined kindred spirits at Agora Financial in 2007 after a 20-year career as an Emmy award-winning writer, producer, and manager in local TV newsrooms nationwide.
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From Businessweek 3/9:
JPMorgan Chase to Increase India Outsourcing 25%
Dave,
Sounds like Financial DoubleSpeak Eugenics on Steroids Demand Destruction to me!
Put PsyOps differently: How Will World War ¥$£€ (We Need to ‘Cull’ the Surplus ‘Useless Eaters’ Population) be fought?
Lara
Keep in mind that the Federal Reserve is owned by these stated banks.
Wake up America – why would the banks let themselve go under when they own the Federal Reserve?
Exactly Ken, they use the tax payers to bail themselves out. They are the Fed, which is why the won’t let anyone audit them (the Fed).
“They want to kill me (The early Federal Bank), I think I’ll kill them first”
quote attributed to the old war horse President Andrew Jackson
Okay…..
Has Mr. Gonigam been chased away by the Mogambo Guru? No word for over a week?
It’s a conspiracy I tell you!
Here we are more than two weeks later and still no Saloon …..
Is no one else worried about Mr. Gonigam?
Okay now this is just SAD!
Does anyone know what happened to Dave Goningam? Shouldn’t somebody call his house see if he is still alive? Maybe swing by the local jail????
Where is our modern day Andrew Jackson? There was that little episode of ethnic cleansing (we’ll uh forget about that. We are the USA only commies and Africans and muslims ethnically cleanse) However, he also cleansed the USA of it’s first central bank.